50% Crash in Airbnb Revenue reported in some Cities

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50% Crash in Airbnb Revenue reported in some Cities

Account Closed
Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes

According to Re:venture consulting (Lots more detail at the article)

https://www.zerohedge.com/econ...

50% Crash in Airbnb Revenue reported in some Cities

But there are now signs that this trend of increased Airbnb listings might be coming to an end as the market reaches saturation in 2023, with Airbnb's CEO warning of a "booking slowdown". At the same time, vacation rental management companies reported a 13% drop in revenue per property in the first quarter of 2023.

Clearly, something is up, with the deluge of Airbnb supply over the last several years now intersecting with a recessionary slowdown in travel demand. A cocktail which is leading to a collapse in revenue for Airbnb operators across America.

The collapse is most notable in the Southwest and Mountain West areas of the country, where Airbnb revenue per listing is down 40-50% YoY. With owners in cities such as Austin, Phoenix, Denver, and San Antonio taking the hardest hit according to data from AllTheRooms.

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
3y
Quote from @Mark Miles:

Lmao, #1 biggest nationwide decline is the Poconos. Can’t say i’m surprised


I have a client with one in the Poconos and they have had a great year not sure whats special about it but they were pleased.  from a users standpoint  ( me) I simply dont care for them anymore prices too high cleaning fee's too high and accomodations very hit and miss.. so back to Motel hotel fishing lodges.
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  • Hamp Lee IIIPro Member
    Real Estate Agent · San Antonio, TX · Member since 2019 · 1k+ posts · 832 votes
    3y

    Thanks for sharing. This is where the pivot comes in. 

    0Reply
  • Mark Miles
    Rental Property Investor · Philadelphia, PA · Member since 2016 · 543 posts · 716 votes
    3y

    Lmao, #1 biggest nationwide decline is the Poconos. Can’t say i’m surprised

    0Reply
  • Loren Polito
    Real Estate Agent · San Antonio, TX · Member since 2017 · 109 posts · 81 votes
    3y
    Quote from @Account Closed:

    According to Re:venture consulting (Lots more detail at the article)

    https://www.zerohedge.com/econ...

    50% Crash in Airbnb Revenue reported in some Cities

    But there are now signs that this trend of increased Airbnb listings might be coming to an end as the market reaches saturation in 2023, with Airbnb's CEO warning of a "booking slowdown". At the same time, vacation rental management companies reported a 13% drop in revenue per property in the first quarter of 2023.

    Clearly, something is up, with the deluge of Airbnb supply over the last several years now intersecting with a recessionary slowdown in travel demand. A cocktail which is leading to a collapse in revenue for Airbnb operators across America.

    The collapse is most notable in the Southwest and Mountain West areas of the country, where Airbnb revenue per listing is down 40-50% YoY. With owners in cities such as Austin, Phoenix, Denver, and San Antonio taking the hardest hit according to data from AllTheRooms.


    Thanks for this info! I'm feeling it first hand here in San Antonio on the STR duplex I purchased. Luckily it's in a great area and I have already been to sell the furnishing and get long term tenants in quickly for a solid rate but it's crazy how quickly things have turned.

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    3y
    Quote from @Mark Miles:

    Lmao, #1 biggest nationwide decline is the Poconos. Can’t say i’m surprised


    I have a client with one in the Poconos and they have had a great year not sure whats special about it but they were pleased.  from a users standpoint  ( me) I simply dont care for them anymore prices too high cleaning fee's too high and accomodations very hit and miss.. so back to Motel hotel fishing lodges.
    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    2Reply
  • Curtis Porter
    Property Manager · Peoria Arizona · Member since 2019 · 39 posts · 24 votes
    3y
    Quote from @Account Closed:

    According to Re:venture consulting (Lots more detail at the article)

    https://www.zerohedge.com/econ...

    50% Crash in Airbnb Revenue reported in some Cities

    But there are now signs that this trend of increased Airbnb listings might be coming to an end as the market reaches saturation in 2023, with Airbnb's CEO warning of a "booking slowdown". At the same time, vacation rental management companies reported a 13% drop in revenue per property in the first quarter of 2023.

    Clearly, something is up, with the deluge of Airbnb supply over the last several years now intersecting with a recessionary slowdown in travel demand. A cocktail which is leading to a collapse in revenue for Airbnb operators across America.

    The collapse is most notable in the Southwest and Mountain West areas of the country, where Airbnb revenue per listing is down 40-50% YoY. With owners in cities such as Austin, Phoenix, Denver, and San Antonio taking the hardest hit according to data from AllTheRooms.

    I wold have thought Joshua tree Ca would be on this list right under Havasu. I am 100% convinced new listings are getting lost in the algorithm.  It used to be you got a listing boost on new listings and now I’m seeing crickets and very few views, even with really good pricing.  People are still traveling, they book higher rent homes with reviews over a new listing with no reviews.  Somethings up.  
    1Reply
  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    3y

    The sky is falling, the sky is falling!!

    2Reply
  • Sarah KensingerPro Member
    Real Estate Consultant · OH · Member since 2023 · 2k+ posts · 1k+ votes
    3y

    Rich Somers just talked about this on Instagram today and made a pretty good point about these numbers that everyone is believing!

    [email protected]330-557-3021
    0Reply
  • Account Closed
    OP
    Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes
    3y
    Quote from @Sarah Kensinger:

    Rich Somers just talked about this on Instagram today and made a pretty good point about these numbers that everyone is believing!

    Oky, so what did he say that impressed you?
    0Reply
  • Andrew SteffensBusiness Member
    Tampa, FL · Member since 2022 · 3k+ posts · 3k+ votes
    3y

    Someone else posted this yesterday, and I got a lot of upvotes so I will copy and paste:

    We are mostly in Tampa with 80 or so units. Similar story: Solid until April, then fell off of a cliff. In the beginning of May we hired a revenue manager in conjunction with our pricing software (RevMax). Since then it has turned around considerably. There are several issues at play IMO:

    1 - Increased Supply - I would not quite say saturation (at least here) but higher supply means more options to guests and lower prices.

    2 - Lower Demand - General Economic conditions coupled with high airfare cost and airfare hassle etc affecting demand.

    Luckily for us FL is growing and has a strong historic tourist economy. There will always be people wanting to visit Clearwater/Saint Pete/ Tampa beaches and other attractions. Our more unique/amenity rich homes with good locations are doing just fine. The more run of the mill homes with cheap renovations and furnishings are suffering more. To anyone suffering I highly recommend:

    1 - Listing on more sites. Airbnb brings in (across all properties) 40% or so of our bookings. VRBO another 30%. The other 30% are a mix from Marriott Homes and Villas, JetBlue/Allegiant Airlines, Google Vacation Rentals, Booking.com, out direct booking sites etc. We are on 14 sites currently.

    2 - Get serious on pricing. We have had to lower our floor rates. We have had to rent for prices lower than we would have ever imagined in June. Inevitably the good properties will survive on slimmer margins and flourish again as the bad properties are forced out of the market. Get good pricing software and consult with experts if that option is available.


    I hope this helps everyone!

    [email protected]813-563-0877
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    0Reply
  • Paul De Luca
    Real Estate Agent · Chicago, IL · Member since 2018 · 1k+ posts · 1k+ votes
    3y

    Oversaturation of supply, macroeconomic slowdown, drastic decrease in purchasing power due to inflation. I'm not surprised.

    The four phases of the real estate cycle are recovery, expansion, hyper supply, and recession.

    1Reply
  • Sarah KensingerPro Member
    Real Estate Consultant · OH · Member since 2023 · 2k+ posts · 1k+ votes
    3y
    Quote from @Account Closed:
    Quote from @Sarah Kensinger:

    Rich Somers just talked about this on Instagram today and made a pretty good point about these numbers that everyone is believing!

    Oky, so what did he say that impressed you?
    Rich Somers (@rich_somers) | Instagram
    I second what he said, we need to be asking where are the numbers coming from? Not every location that is "down" is truly on the downside and there is real time data to back it up.

    [email protected]330-557-3021
    0Reply
  • Austin F.
    Investor · MI · Member since 2015 · 227 posts · 478 votes
    3y

    Not an STR guy, but I am curious if "reverting to trend" would be more accurate than STR BUST!!!

    2021, 2022 were not average, I wonder if 2019, and 2023 are "closer" than 2022 to 2019

    0Reply
  • Jordan MoorheadBusiness Member
    Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
    3y

    I've not seen this on ours in Austin nor have I talked to anyone else who has. I'm also in a group with lots of other operators and the general consensus is that revenue is down but more around 10% for most markets.

    [email protected]512-888-9122
    The Moorhead Team5140 Reviews
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    1Reply
  • Paul Duran
    Real Estate Agent · San Antonio, TX · Member since 2018 · 14 posts · 9 votes
    3y

    I have two AirBnB properties in San Antonio and I've seen a major decline in bookings since November 2022 on my 3 bedroom / 1 bath home. The numbers make sense as a long-term rental so I just got a tenant in place last month. My other AirBnB is a small efficiency apartment targeted for couples (with pets) needing a place for the weekend and I haven't seen much of a decline on that one. I believe AirBnB will still work in San Antonio, but due to an oversaturated market and from what I've seen with my short-term rentals, you need to have either a prime location or a very unique property. 

    1Reply
  • Account Closed
    OP
    Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes
    3y
    Quote from @Sarah Kensinger:
    Quote from @Account Closed:
    Quote from @Sarah Kensinger:

    Rich Somers just talked about this on Instagram today and made a pretty good point about these numbers that everyone is believing!

    Oky, so what did he say that impressed you?
    Rich Somers (@rich_somers) | Instagram
    I second what he said, we need to be asking where are the numbers coming from? Not every location that is "down" is truly on the downside and there is real time data to back it up.

    It's likely that the type of STR and the price play a major role. For instance, a 1 bedroom apartment vs a 3 bed 2 bath house, vs a nice vacation rental. Those categories likely all are affected differently. I'd like to see it broken down into type but I haven't found that anywhere. 
    2Reply
  • Jason Smith
    Member since 2021 · 109 posts · 130 votes
    3y

    @Jay Hinrichs Agree on the fees, housekeeping and accomodations being hit or miss. The rating system is out of whack we have stayed at 4.8-5 star rated AirBNBs that would 3.2-3.4 stars if they were a hotel on Google reviews. Plus they want you to start the laundry, start the dishwasher (we don't cook on vacation), take out the trash, etc. Plus pay $130 cleaning fee.

    1Reply
  • Account Closed
    OP
    Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes
    3y
    Quote from @Jason Smith:

    @Jay Hinrichs Agree on the fees, housekeeping and accomodations being hit or miss. The rating system is out of whack we have stayed at 4.8-5 star rated AirBNBs that would 3.2-3.4 stars if they were a hotel on Google reviews. Plus they want you to start the laundry, start the dishwasher (we don't cook on vacation), take out the trash, etc. Plus pay $130 cleaning fee.

    Well said.

    0Reply
  • Fiza Ah
    Investor · Member since 2020 · 80 posts · 71 votes
    3y
    Quote from @Jason Smith:

    @Jay Hinrichs Agree on the fees, housekeeping and accomodations being hit or miss. The rating system is out of whack we have stayed at 4.8-5 star rated AirBNBs that would 3.2-3.4 stars if they were a hotel on Google reviews. Plus they want you to start the laundry, start the dishwasher (we don't cook on vacation), take out the trash, etc. Plus pay $130 cleaning fee.


     Pretty sure you don't have to start the dishwasher if you didn't have any dishes ;)

    I concur on booking revenue being down 50%. We're seeing this in our Charleston market.

    0Reply
  • Chad McMahan
    Residential Real Estate Broker · Sedona, AZ · Member since 2017 · 754 posts · 504 votes
    3y
    Quote from @Account Closed:

    According to Re:venture consulting (Lots more detail at the article)

    https://www.zerohedge.com/econ...

    50% Crash in Airbnb Revenue reported in some Cities

    But there are now signs that this trend of increased Airbnb listings might be coming to an end as the market reaches saturation in 2023, with Airbnb's CEO warning of a "booking slowdown". At the same time, vacation rental management companies reported a 13% drop in revenue per property in the first quarter of 2023.

    Clearly, something is up, with the deluge of Airbnb supply over the last several years now intersecting with a recessionary slowdown in travel demand. A cocktail which is leading to a collapse in revenue for Airbnb operators across America.

    The collapse is most notable in the Southwest and Mountain West areas of the country, where Airbnb revenue per listing is down 40-50% YoY. With owners in cities such as Austin, Phoenix, Denver, and San Antonio taking the hardest hit according to data from AllTheRooms.

    This has felt imminent to some of us. As I've been saying for quite some time on BP, if you invest in a STR in a city, you have to be extremely careful to buy and nurture a unique stay that is highly desirable. Otherwise, invest in destinations like Sedona- and you still have to be careful. The grand majority of my clients are doing extremely well in the Sedona area, but only because we very carefully and tactfully craft a plan of success for each and every property- and only recommend properties that give a great stating point.
    I often hear people tell me they bought a property through the typical, non specialized and hardly experienced real estate agent. Their property does not perform, and then they put it back on the market months later and take a loss. That's a huge investment of time and money and heartache to fail, when they could have succeeded.

    I often advice client to NOT purchase certain properties, as I treat every purchase as though it will be their flagship property, to bolster and support their portfolio.

    1Reply
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